Permanent 100% Bonus Depreciation: Notice 2026-11 Made Simple

The IRS just gave businesses a reason to celebrate. After years of watching bonus depreciation phase down, it’s back, and this time, it’s here to stay. On January 14, 2026, the IRS issued Notice 2026-11, providing some structure around the permanent 100 percent bonus depreciation under the One Big Beautiful Bill Act (OBBBA). This means businesses can fully deduct the cost of new assets, with no more phaseouts or cutoffs, starting with property acquired and placed in service after January 19, 2025.​

Full Expensing is Permanent

The highlight of Notice 2026-11 is that full expensing is now permanent for most tangible business assets. Property with a MACRS life of 20 years or less generally qualifies, including equipment, computers, vehicles, furniture, and commercial improvements such as roofs, lighting, and HVAC systems. Newly built or improved manufacturing plants and qualified farm plantings such as orchards and vineyards also qualify as well.

Note that section 179 expensing remains a separate option with its own dollar limits ($2.5 million for 2025, phased out above $4 million in purchases).

Flexible Elections to Fit Your Needs

The notice also gives taxpayers more control over their deductions. You can elect to take less than the full 100% deduction, specifically 40% (or 60% for long-term construction projects and some aircraft). This works perfectly for smoothing income or preserving losses. Simply file a statement with Form 4562. Also, for big construction projects, you can treat individual components bought or built after January 19 as separately eligible for the full deduction. Alternatively, you can opt out of bonus depreciation entirely for any asset class if it better fits your overall tax strategy.

Sound Recordings Now Qualify Too

Music producers and podcasters also get a boost. Qualified U.S.-produced sound recordings starting after July 4, 2025, count as eligible property. They're acquired when principal recording begins and placed in service at first release or broadcast, letting you expense costs upfront. You can still elect out if needed.​

Planning with Confidence

Notice 2026-11 changes the game for business investment and tax planning. With permanent 100% bonus depreciation now in place, the uncertainty that came with phaseouts is gone. Businesses can rely on this guidance right away for 2025 assets placed in service before final regulations take effect, just apply it consistently. It’s a powerful incentive to reinvest in your business with confidence, simplifying depreciation and giving you clearer, more flexible planning opportunities for the future.

Contact your HHM advisor to discuss how this guidance may affect your business.

Read the IRS release: IR-2026-06

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